Ratan Tata successor likely by end-April

Tata Group’s search for a successor to chairman Ratan Tata is drawing to a close and the name of the new leader could be announced as early as end-April, a member of the search committee told DNA.

Tata is required by company rules to retire when he turns 75, in December 2012.

The five-member search panel constituted last August to zero in on the right candidate has met nine times so far, said R K Krishna Kumar, non-executive director of Tata Sons, the holding company for the $71 billion salt-to-software conglomerate Tata Group.

“The committee has been meeting and going through a detailed process. We have met nine times and have covered several possibilities. However, we will be ready only by the end of April or May,” he said.

Krishna Kumar, the first panel member to have spoken to the media, declined to share other details of the process.
But his statement suggests the panel has met at least once a month since it was set up.

The Tatas have set an early deadline as Ratan Tata desires that the shortlisted candidate spend time with him as part of an induction process to the top job.

The other members of the panel include NA Soonawala, former vice chairman of Tata Sons, Cyrus Mistry, the younger son of construction tycoon Pallonji Mistry who also holds an 18% stake in the main holding company, and Shirin Bharucha, a lawyer who has worked with the Tata Group for several years.

British businessman Lord Bhattacharya, the founder of Warwick Manufacturing Group, an industrial consultancy and part of Warwick University, is the fifth and the external member of the panel. Soonawala and Bharucha are part of the panel by virtue of being trustees of the two trusts that control Tata Sons.

Ratan Tata, incidentally, is not a member of the panel, set up to find his successor.

Tata Group has close to 100 subsidiaries, including Tata Steel, the country’s biggest private sector steel company, TCS, the largest software exporter and Tata Motors, the biggest automotive producer.

Interestingly, in 2010, the group saw 65% of its $71 billion revenues generated overseas. As the dynamics of the group have changed dramatically over the years, with overseas businesses such as Jaguar Land Rover, Corus and Tetley forming a sizeable chunk of the group turnover, a key attribute being sought in the probables is experience to run international business.

Experts think it would be a tough job ahead of the incoming successor to keep pace with the growth seen by the group in recent years. The group’s sales have grown by almost 25 times since Ratan Tata took over as chairman in 1991, while profits have jumped almost seven times the 1991 level.

After the announcement of the panel last year, two Indian-born US-based executives, PepsiCo CEO Indra Nooyi and Nikesh Arora, president of global sales operations and business development for Google Inc, were tipped to be in the league to head the Tata Group.

However, both Nooyi and Arora have ruled themselves out of the race, leaving many to believe that the most likely successor to Ratan Tata is Noel Tata. Noel, 54, is the son-in-law of Pallonji Mistry.